Traditionally farming was regarded as a type of protected sector.   Many employees and their families were housed on the farms.   Various additional benefits were provided by the farmers.   This all changed when those employees were included in the Labour Relations Act 66 of 1995.  Other statutes protected the employees living on the land as well.   This started the process of moving employees off the farms and mechanising as much as possible.   The process has now been given added impetus by the latest fixed entry-level wage for farm employees.   Not only that but the minimum has been fixed for a few years at a rate above inflation.   This deprives farmers of the ability to adjust wages according to the increase in their increasing operating costs and falling income.   Farmers then have no alternative but to shed jobs or cease farming.

Earlier posts on GilesFiles

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Labour axed as farmers face soaring wages, costs – Alexander Parker with Carol Paton – 7.02.2013

AT LEAST 2,000 farm workers were issued with retrenchment notices on Wednesday as the agricultural sector shed jobs ahead of the implementation of a new minimum wage, and as mechanisation on farms gathers pace.

Agriculture has shed hundreds of thousands of jobs since minimum wages were first implemented in 2000.   Analysts warn that thousands more will be lost when the new wage — increased by 50% by Labour Minister Mildred Oliphant — comes into effect on March 1.

Industry insiders warned on Wednesday that mechanisation on farms had begun some time ago and was picking up pace.

Farmers in Limpopo and Mpumalanga and milk producers were said to have started serving workers with retrenchment notices, but Western Cape farms were quiet with no reported threats of dismissal.

The reaction of farmers to the new wage has been most marked in Limpopo, where Agri South Africa said 730 workers had been given notice in George’s Valley and Magoebaskloof.   Farmers in Mpumalanga have said they would follow the Magoebaskloof example and cut back on labour.

The move to mechanise has lit a fire under farm implement sales.   Last year was “exceptional”, said Agricultural Machinery Association secretary Jim Rankin.

Farmers were abandoning labour-intensive sectors to focus on those that were easily mechanised, Transvaal Agricultural Union of South Africa chairman Louis Meintjes warned on Wednesday.

He described the past few months as a “tragedy”, but asked: “What can farmers do? We started to mechanise some time ago, to get rid of labour, or to move to another sector.”

“Our information is that at least 2,000 workers have received notices.   It’s done on a financial basis for survival.   The minister put us in this position,” he said.   The flight from labour-intensive agricultural practices had already severely affected the price of foodstuffs — such as vegetables — produced in a manner that cannot be mechanised, Econometrix chief economist Azar Jammine said.

“This will be inflationary.   Fruit and vegetable prices have already risen more than other foodstuffs,” he said on Wednesday.

New minimum wage ‘will spur overhaul of farming’ – Carol Paton – 5.02.2013

RAISING minimum wages for farm workers by 50% to R105 will precipitate a huge restructuring of agriculture, business and labour leaders have warned.

Labour Minister Mildred Oliphant based the new minimum on a recommendation by the Employment Conditions Commission, a statutory body comprised of business, labour and two independent experts, with the task of recommending sectoral wage determinations. The commission, in turn, relied on research by the Bureau for Food and Agricultural Policy, a think-tank at the universities of Stellenbosch and Pretoria.

The research showed if wages were to rise any higher than R105 a day, many farms would be unable to cover their operating expenses.

Ms Oliphant said at a press briefing in Pretoria on Monday that “is why the majority view (of the commission) was that the minimum wage should be R105”.

While the report said it was difficult to estimate the job losses that would result from a R105 minimum wage, it also heralded the beginning of a transition away from a dependence “on cheap, unskilled labour” to a more efficient production system in which more skilled, younger workers would be employed.

Agri South Africa executive director Hans van der Merwe said the new minimum wage, which comes into effect on March 1, was unaffordable to small and medium businesses.

“It will lead to major structural adjustment, which will mean more capital intensity and bigger units, which will in time take over from small and medium farmers. Tough decisions will have to be made on each farm,” he said.

Minister reveals new minimum wage for farm workers – 4.02.2013

“The new minimum wage … is R105 per day for employees who work nine hours a day, or R11.66 per hour, R525 weekly or R2,274.82 per month,” Ms Oliphant told reporters in Pretoria.

The new sectoral determination will be promulgated for a three-year period. In the second and third year, wages will be increased by the consumer price index, as a measure of inflation, plus 1.5%.

Employers have warned, however, that any wage higher than R85 a day will result in labour-intensive commodities — such as fruit and vegetables — being rendered unviable and lead to large-scale job losses.